The coming year could mark a turning point for the expansion of Canada’s oil and gas sector as governments look to harness its resources to drive economic independence and prosperity.

Against a backdrop of steady drilling activity and continued production growth, new major export projects are expected to take significant steps forward. 

Here are five key developments to watch. 

5. Modest growth in drilling activity

Oil and gas drilling in central Alberta, fall 2025. Photo supplied to the Canadian Energy Centre

Oil and gas drilling in Western Canada is set for modest increases in 2026 amid flat oil price forecasts and softer natural gas prices, according to the Canadian Association of Energy Contractors (CAOEC).

CAOEC projects an average of 213 active drilling rigs, up from 201 in 2025. A total of 5,709 wells are expected to be drilled, an increase of just under three per cent.

This will be accompanied by an average of 458 active service rigs, up from 447 in 2025. 

The activity is expected to support 85,000 direct and indirect jobs over the year. 

“These aren’t abstract figures; they’re the heartbeat of Canada, the proof that our work isn’t just about extracting resources — it’s about giving Canadians a hopeful future,” said CAOEC CEO Mark Scholz.

4. New investment spurred by Alberta-Canada agreement

Oil sands workers in northern Alberta. Photo courtesy Pathways Alliance

The recent wide-ranging energy agreement between the Alberta and federal governments could unlock new investment in data centres, emissions-reduction technology and oil sands growth in 2026.

The deal is “formidable,” Edmonton-based Capital Power CEO Avik Dey told investors in December. 

“It allows us a pathway to building new natural gas-fired power generation in Alberta,” he said.

The company announced it is now negotiating an electricity supply agreement with an unnamed data centre developer in the province.

Policy think tank Clean Prosperity estimates the $130-per-tonne carbon credit price agreed to by Alberta and Ottawa could unlock more than $90 billion in low-carbon investment including carbon capture and storage (CCS).

And as details of Alberta’s proposed pipeline to the northwest coast become clearer, oil sands producers could begin dusting off expansion plans.

According to BMO Capital Markets, producers have already submitted project proposals with combined capacity of 4.1 million barrels per day — enough to more than double current oil sands production.

This total includes both approved projects and proposals that are currently on hold or delayed.

3. Data centres taking flight

Alberta’s goal of attracting $100 billion in data centre investment is expected to advance in 2026 as key policy measures take shape and new projects receive approval.

Interest is strong, with proposed data centres now requesting more than 20 gigawatts of power, according to the Alberta Electric System Operator. 

The province passed legislation in 2025 that encourages data centres to bring their own generation to support their connection to the power grid. This is designed to enhance reliability of the grid while accelerating the approval process for data centre projects.

In December, two European companies announced a $1.26 billion plan to build four new AI-ready data centres in Alberta. 

Portugal-based Technologies New Energy will supply 80 per cent of the power for the new data centres for Data District Inc., a division of Swiss asset management firm Alcral AG. 

“Alberta offers the energy resources, industrial base and investment momentum to support this growth,” TNE said in a statement.

Initial operations are targeted for 2026.

2. Go-ahead for Ksi Lisims LNG

Rendering of the proposed Ksi Lisims LNG project. Image courtesy Ksi Lisims LNG

An Indigenous-led floating LNG terminal on B.C.’s northern coast near Alaska is “not far off” from a final decision to proceed. 

That milestone is expected in 2026, spokeswoman Rebecca Scott said in November. 

Ksi Lisims (pronounced “s’lisims”) is a partnership between the Nisga’a Nation, a consortium of Canadian natural gas producers called Rockies LNG, and a subsidiary of Houston-based Western LNG. 

The 12-million-tonne-per-year project would help significantly expand Canada’s LNG export capacity, which is currently about 14 million tonnes per year. 

In November, Ksi Lisims was referred for fast-tracking by Canada’s new Major Projects Office (MPO). 

Start-up is targeted for 2029.   

1. Advancing a new northwest coast oil pipeline

Pipe in storage for the Trans Mountain expansion near Hope, B.C. in August 2019. CP Images photo

Alberta’s application to the MPO for a new oil pipeline to the northwest coast is expected by July 1, 2026. 

It’s a project that’s been designated in the national interest as a key measure to establish Canada as an energy superpower.

The pipeline application is expected to target a deep-water port for oil exports to Asian markets, while creating opportunities for Indigenous ownership. 

If a proposal is approved, the federal government has committed to enabling bitumen exports, including an “appropriate adjustment” of the tanker moratorium on B.C.’s north coast if necessary. 

The governments have also agreed to a maximum two-year timeframe for permitting and approvals.

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Canada’s energy landscape changed significantly in 2025, with mounting U.S. economic pressures reinforcing the central role oil and gas can play in safeguarding the country’s independence.

Here are the Canadian Energy Centre’s top five most-viewed stories of the year.

5. Alberta’s massive oil and gas reserves keep growing – here’s why

The Northern Lights, aurora borealis, make an appearance over pumpjacks near Cremona, Alta., Thursday, Oct. 10, 2024. CP Images photo

Analysis commissioned this spring by the Alberta Energy Regulator increased the province’s natural gas reserves by more than 400 per cent, bumping Canada into the global top 10.

Even with record production, Alberta’s oil reserves – already fourth in the world – also increased by seven billion barrels.

According to McDaniel & Associates, which conducted the report, these reserves are likely to become increasingly important as global demand continues to rise and there is limited production growth from other sources, including the United States.

4. Canada’s pipeline builders ready to get to work

Photo courtesy Coastal GasLink

Canada could be on the cusp of a “golden age” for building major energy projects, said Kevin O’Donnell, executive director of the Mississauga, Ont.-based Pipe Line Contractors Association of Canada.

That eagerness is shared by the Edmonton-based Progressive Contractors Association of Canada (PCA), which launched a “Let’s Get Building” advocacy campaign urging all Canadian politicians to focus on getting major projects built.

“The sooner these nation-building projects get underway, the sooner Canadians reap the rewards through new trading partnerships, good jobs and a more stable economy,” said PCA chief executive Paul de Jong. 

3. New Canadian oil and gas pipelines a $38 billion missed opportunity, says Montreal Economic Institute

Steel pipe in storage for the Trans Mountain Pipeline expansion in 2022. Photo courtesy Trans Mountain Corporation

In March, a report by the Montreal Economic Institute (MEI) underscored the economic opportunity of Canada building new pipeline export capacity.

MEI found that if the proposed Energy East and Gazoduq/GNL Quebec projects had been built, Canada would have been able to export $38 billion worth of oil and gas to non-U.S. destinations in 2024.

“We would be able to have more prosperity for Canada, more revenue for governments because they collect royalties that go to government programs,” said MEI senior policy analyst Gabriel Giguère. 

“I believe everybody’s winning with these kinds of infrastructure projects.”

2. Keyera ‘Canadianizes’ natural gas liquids with $5.15 billion acquisition

Keyera Corp.’s natural gas liquids facilities in Fort Saskatchewan, Alta. Photo courtesy Keyera Corp.

In June, Keyera Corp. announced a $5.15 billion deal to acquire the majority of Plains American Pipelines LLP’s Canadian natural gas liquids (NGL) business, creating a cross-Canada NGL corridor that includes a storage hub in Sarnia, Ontario. 

The acquisition will connect NGLs from the growing Montney and Duvernay plays in Alberta and B.C. to markets in central Canada and the eastern U.S. seaboard.

“Having a Canadian source for natural gas would be our preference,” said Sarnia mayor Mike Bradley. 

“We see Keyera’s acquisition as strengthening our region as an energy hub.” 

1. Explained: Why Canadian oil is so important to the United States

Enbridge’s Cheecham Terminal near Fort McMurray, Alberta is a key oil storage hub that moves light and heavy crude along the Enbridge network. Photo courtesy Enbridge

The United States has become the world’s largest oil producer, but its reliance on oil imports from Canada has never been higher.

Many refineries in the United States are specifically designed to process heavy oil, primarily in the U.S. Midwest and U.S. Gulf Coast.

According to the Alberta Petroleum Marketing Commission, the top five U.S. refineries running the most Alberta crude are:

• Marathon Petroleum, Robinson, Illinois (100% Alberta crude)
• Exxon Mobil, Joliet, Illinois (96% Alberta crude)
• CHS Inc., Laurel, Montana (95% Alberta crude)
• Phillips 66, Billings, Montana (92% Alberta crude)
• Citgo, Lemont, Illinois (78% Alberta crude)

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Indigenous communities across British Columbia are playing a critical role in building the foundation for LNG—from natural gas supply to pipeline corridors and export terminals—helping drive momentum as Canada’s LNG export sector takes its first steps.

A growing role for McLeod Lake Indian Band

One of these communities is the McLeod Lake Indian Band. Part of the Tse’khene group of Aboriginal peoples, McLeod Lake is located about 150 kilometres north of Prince George in the Montney natural gas region.

“McLeod Lake Indian Band wants to create a business environment within its traditional territory that is conducive to the responsible development of the area’s natural resources,” said Jacob Albertson, CEO of the Duz Cho Group of Companies, which is 100 per cent owned by the band.

Jacob Albertson, CEO of Duz Cho Group of Companies.

Since 2018, the bustling business has seen revenues surge nearly tenfold, from $14.5 million to $134 million annually.

‘Canadian gas is Indigenous gas’

Albertson recently joined the board of the First Nations Natural Gas Alliance (formerly the First Nations LNG Alliance), which has member organizations from B.C., Alberta and Newfoundland and Labrador.

“Canadian natural gas is Indigenous natural gas,” said Alliance CEO Karen Ogen, who served as elected Chief of the Wet’suwet’en First Nation from 2010 to 2016.

Ogen’s goal is to inspire and support more First Nations engaging in discussions with industry and government about potential resource opportunities.

Karen Ogen, CEO of the First Nations Natural Gas Alliance.

“We can show the world that Canada’s natural gas can be developed responsibly and advance economic reconciliation for the benefit of our citizens and those around the world who need an alternative to coal,” she said.

The Alliance’s work helped advance the Coastal GasLink pipeline, which is now delivering natural gas from northeast B.C. to the LNG Canada terminal at Kitimat, in the traditional territory of the Haisla Nation. 

“Attitudes have changed as knowledge has improved,” Albertson said. 

“That’s why I’m excited about the future and how the people of this region can benefit from it.”

A bigger voice for First Nations in B.C.’s interior

McLeod Lake was one of 20 Indigenous bands along the route whose elected leadership signed agreements with the pipeline project. 

Albertson sees joining the Alliance’s board as a chance to amplify the voice of B.C.’s interior Nations like McLeod Lake, whose traditional territories host much of the natural gas that feeds coastal LNG exports.

It’s important for community members to understand both the impacts and benefits of development, he said.

Business transparency helps builds support

To keep members better informed about local projects, Albertson began sharing Duz Cho’s monthly reports with the band’s 550 members, along with quarterly meetings in Prince George, Vancouver and Calgary.

“That transparency is very important,” Albertson said. 

“We’ve really focused on reporting about the benefits of these projects as well as the impacts. It’s helped the membership realize these projects are good for the community.”

Duz Cho now seeks job creation opportunities and equity partnerships rather than simply collecting royalties from industry.

“We restructured some of the agreements so members would have those opportunities,” says Albertson.

“There is a real value to hiring community members, who have firsthand knowledge of the projects they work on and can share that within the community.”

Duz Cho sign in Chetwynd, B.C. Photograph for Canadian Energy Centre

Education key to energy expansion in B.C. 

Improving understanding of resource projects is critical as Canada looks to expand its energy exports through B.C., Ogen said. 

“Those types of education and awareness need to happen, not only for LNG, but for oil,” she said. 

“I think that the process that we did helped us inform a lot of people.”

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Canada’s long-awaited LNG sector is taking shape, with the first export terminal operating and construction well underway on two more major projects.

Here’s a look at recent company photos showing progress on LNG Canada, Woodfibre LNG and Cedar LNG, laying the groundwork for an industry that will strengthen Canada’s role in global natural gas markets.

LNG Canada

Canada’s first LNG export facility has been operating for nearly five months, with regular shipments sailing to Asia. 

According to the Canada Energy Regulator (CER), as of September 2025 the terminal had exported more than 38 billion cubic feet of natural gas, or about two days worth of Canada’s total natural gas production.

Woodfibre LNG

Construction is more than halfway complete on the Woodfibre LNG project near Squamish, B.C.

Designed to export the equivalent of about 280 million cubic feet of natural gas per day, Woodfibre remains on schedule to start up in 2027, according to Enbridge, which holds a 30 per cent stake in the project.

Cedar LNG

Construction is well underway on the Cedar LNG project, a partnership between the Haisla Nation and Pembina Pipeline Corporation.

Located near the LNG Canada terminal in Kitimat, the floating facility will have capacity to export the equivalent of about 400 million cubic feet of natural gas per day.

Pembina recently reported that Cedar LNG remains on track to begin operations in late 2028.

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The first pipe is officially in the ground for the natural gas line that will supply the world’s first Indigenous-led LNG project. 

Eight kilometres of steel — known as the Cedar LNG pipeline — will connect the Haisla Nation’s floating LNG export terminal at Kitimat, B.C. to the Coastal GasLink pipeline, delivering natural gas produced nearly 700 kilometres away in the province’s northeast. 

The project posted an image of the new pipeline construction to its social media feeds on July 10. 

First pipe is installed for the Cedar LNG pipeline. Photo courtesy Cedar LNG

The Cedar LNG pipeline connects to Coastal GasLink just outside the fence of the now operational LNG Canada terminal via a new metering station and a short system operated by TC Energy called Cedar Link.  

By enabling the development of Cedar LNG, a partnership between the Haisla and Pembina Pipeline Corporation, the Cedar LNG pipeline project will stand as a landmark in Indigenous ownership within Canada’s resource sector.

It’s the result of a deal engineered by the Nation, whose traditional territory spans the Kitimat coast. 

In fall 2018, as part of a benefit agreement with the LNG Canada project, the Haisla negotiated space on Coastal GasLink for its own LNG project.

That agreement laid the path for Cedar LNG, which started construction in July 2024. 

“I think the uniqueness of Cedar is that it was Indigenous-owned from the beginning,” Haisla Nation chief councillor Crystal Smith said on a recent ARC Energy Ideas podcast.

“[For] a little over 10 years, it’s been in our sight and in our vision.”

Site preparation work to support the Cedar LNG floating terminal. Photo courtesy Cedar LNG

Construction of the $4.6 billion Cedar LNG project is part of what TD Securities analysts called “a new era for Canadian natural gas” ushered in by the recent completion of LNG Canada. 

Since July 1, three separate LNG carriers have left the $18 billion facility with shipments destined for Japan and South Korea.   

“The Western Canadian Sedimentary Basin is on the cusp of experiencing the largest increase in natural gas export volume in its history,” TD Securities said in a research note. 

Pembina said Cedar LNG can help achieve higher prices for Canadian natural gas while enhancing global energy security. 

The company expects it to go into service around 2028. 

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Sinbad may have sailed the seven seas, but he never saw as much of the briny deep as Shawn Jones.

Jones, who has spent almost three decades working on ships around the world, had both of his feet firmly planted ashore on an early April afternoon as HaiSea Marine tugboats escorted the first LNG carrier into its berth at LNG Canada’s marine terminal jetty in Kitimat, B.C.

The vessel safely arrived in the traditional territory of the Haisla Nation carrying a cargo of liquefied natural gas that was offloaded into the facility for equipment testing in advance of the terminal’s first LNG export cargoes.

It was a historic moment even for the experienced seafarer, who now serves as HaiSea’s senior operations manager.

“Our crews have been training and preparing for this moment for a very long time. Everyone, from the tug crews to the shore team came together and it went seamlessly,” said Jones, who holds the highest grade of seafarer qualification as a master mariner.

“This import cargo was a trial run, as soon many of these LNG carriers will come through the channel and sail off to markets around the world.”

Spanning the length of about two and a half football fields, the first LNG carrier, called Gaslog Glasgow, is targeted to arrive on June 29, according to Reuters news.

Shipments will gradually increase to 180 vessels a year coming through the channel. And all of them will be guided by HaiSea tugboats.

“We have two escort tugs to guide them through the channel and then three harbour tugs working with shore teams to help dock and undock them,” said Jones.

“There’s not a lot of large commercial traffic. We see private boaters and fishermen along with supply vessels, but nothing as big as these LNG carriers. That’s why we spent a year training for this.”

HaiSea is a joint venture between Vancouver-based Seaspan Marine and the Haisla Nation, whose traditional lands oversee the Douglas Channel.

Bearing Haisla names, the company’s five tugboats reflect the blend of tradition and state-of-the-art technology.

“The three electric harbour tugs are able to run completely on battery power while the two escort tugs have the ability to run on LNG or diesel,” said Jones, who moved to Kitimat last year from South Korea, where he commissioned oil and gas ships at the Hanwha Ocean shipyard.

“I graduated from a maritime academy back in 1995 and I would have never believed I would see the day when boats ran on batteries or LNG.”

The California native, whose career has taken him into the waters of the Gulf of Mexico, the Mediterranean and off the coast of Africa, has developed a deep respect for the Haisla Nation’s seafaring ability.

“About 20 per cent of HaiSea’s workforce is Indigenous and the majority of those employees are members of the Haisla Nation,” said  Jones.

“Being on the water is in their DNA. They are a seafaring nation because they have grown up next to the water so they’ve spent time fishing and boating. There are skills they have to learn but they want to learn and progress and we will help them with that. We are working with BCIT [the British Columbia Institute of Technology] to get training courses locally.”

And with construction now underway on the Haisla Nation’s own Cedar LNG project, Jones expects more opportunities for community members, both onshore and in the open water.

“Our plan is to keep the positive momentum going and focus on additional training to prepare for the first LNG export cargo, which will be history in the making for Canada, LNG Canada and HaiSea Marine.”

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As the world’s energy requirements grow along with the need to reduce emissions, natural gas is no longer viewed as just a “bridge fuel” to the future. 

To keep energy reliable, secure and affordable, it is part of the destination. 

Starting this summer, Canada will deliver liquefied natural gas (LNG) globally on ocean vessels. 

LNG from Canada has a significant advantage—it has a smaller environmental footprint. But why?  

Leading Emissions Per Tonne

The global average emissions intensity of LNG is 0.35 per cent CO2 per tonne, according to Oxford Energy Institute. 

The LNG Canada project, set to ship its first cargo within weeks, is designed to have less than half the emissions intensity, at 0.15 per cent CO2 per tonne.  

Two projects that are under construction, Cedar LNG and Woodfibre LNG, are expected to have emissions intensity of 0.08 per cent and 0.04 per cent, respectively. 

There are four key reasons why Canada has the advantage.

1. Colder climate 

LNG is produced by supercooling natural gas to around minus 162 degrees Celsius. In colder climates, this process typically requires less equipment and effort, saving energy and reducing emissions, according to researchers from the Universities of Calgary and Toronto.  

For example, the average temperature in Kitimat, B.C. is much cooler (7°C) than the U.S. Gulf Coast (e.g.: 22°C in Corpus Christi, Texas).

2. Shorter shipping distances 

West Coast LNG projects in Canada are about 10 shipping days from Asia, compared to 20 days for shipments from the U.S. Gulf Coast that transit the Panama Canal, according to Natural Resources Canada.  

Proposed projects in Eastern Canada are 6 to 8 shipping days from Europe, the shortest distance of any North American LNG projects, NRCan says.  

Less time for LNG tankers in the water means less fuel use and lower emissions. 

3. Use of hydroelectricity 

More than half of Canada’s electricity comes from hydropower, helping reduce emissions from the country’s power grid, according to the Canada Energy Regulator.  

LNG projects are expected to connect to the grid to use hydroelectricity to fuel either part or all of their operations, particularly as the new Site C project in B.C. comes online and makes more hydropower available.   

4. Methane emissions reduction 

Canada’s oil and gas producers are achieving success in reducing methane emissions.  

In Alberta, producers met the target of reducing methane emissions by 45% below 2014 levels three years ahead of schedule in 2022—and surpassed it in 2023 with a 52% reduction.

In B.C., producers achieved a 51 per cent reduction over the same period. 

Regulators in Washington state affirmed this leadership when the permit for the Tacoma LNG project required sourcing natural gas specifically from British Columbia or Alberta. 

The Puget Sound Clean Air Agency determined that Canadian natural gas had a lower environmental impact than U.S. gas, noting in 2019 that methane emissions in the U.S. “may be as much as five times higher than those from Canada.” 

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